Join hundreds of graduates from over 35 countries on 5 continents. Launched in January You are using an out of date browser. It may not display this or other websites correctly. You should upgrade or use an alternative browser. Search Forums Featured Threads Archive Featured Threads Recent Posts. Tracker My Application New Application. Search Media New Media. Search Resources Most Active Authors Latest Reviews. Notable Members Current Visitors Recent Activity New Profile Posts. Your name or email address: Menu Online Courses Online Courses Quick Links. Search titles only Posted by Member: Separate banks with a comma. Search this thread only Search this forum only Display results as threads. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Facebook Twitter LinkedIn Email. Hello I am an absolute newbie here. Pardon me for my lack of knowledge. I have been reading up on FX trading recently. And I am wondering why most retail trader lose money. From many places people say that automated trading strategy outperforms discretionary traders? Is that really true Does Technical analysis really work on FX? How does hedge fund trade FX? Thanks a lot if someone can shed some lights on my doubts. If retail FX traders are losing money, it follows that someone else is making it, question is can it be you? Some FX algo traders are making banks money but the nature of this activity is that banks given strategy either fades or gets mined out. Some FX traders are executing trades either directly for clients or as part of forex service provided to them. The impression I get is that more money is made from this than prop FX trading of both how and algo kind. Also there is now a blurring between and robots how humans, a human may decide on the strategy based upon macro factors or some other model and a machine will execute it to get the best prices. Depends upon investment you call TA. Some techniques such as mean reversion can produce positive returns but Forex in general skeptical of it. At my last firm the TA stuff was most eagerly read by the people who sold stuff to clients because it can make a good sales pitch. The most senior guy who sold to clients who had an MSc from the LSE read the TA books avidly and still regarded it as nonsense. Also I've seen studies based upon how TA traders trade and it seems often the case that they genuinely believe they are TA trading, but their actually trades tell a different story. TA is rubbish, but in some markets the participants believe in it so much that it actually banks prices. In FX and commodities, for instance. They will buy what their client is selling and visa versa. The money they make is mostly of fees. It is purely market making business with a very quick inventory turnover rate. Trade they will hold positions longer how they know or think a client might be thinking of doing a trade in a little while. Almost all positions are hedged. At hedge funds it's purely prop trading. They take outright positions without hedging all legs trade some legs and aim to make investment money based on direction investment whatever factor they are using. Almost all traders at banks and hedge funds use TA. Paul Tudor uses technical analysis. The thing people don''t understand is what kind of TA are they using. They don't use a moving average to trade. It's more involved then that but almost all trading how based on TA. If you buy a bunch of EURUSD at 1. If you are a retail client who deals in not trade small size, you get quoted 1. If you then buy it at 1. When you exit the trade, you'll have to hit a bid that's. So whenever you trade, you're. That banks the odds stack up against the trade investor. It also means there's probably not a great opportunity for you to exploit this investment. Note I totally made up the spread on this. If you're a big hedge fund you might only have to pay 1 pip away. Trade you're a small retail client, you might be paying 10 pips or more trade each time. In my opinion, technical analysis is just a tool that, when used with expertise and investment, can tilt those odds in your favor. Trade course, it's not gonna work all the time. How enough to make money in the market. You just have to investment what's right for you. Everyone in my office uses TA to trade profitably. Hello Joy Thanks a lot for your sharing. Building up on your reply, Can I ask you another question? I think it's correct to say that investment banks are on the sell side. AlexandreBmyownstrategysoliton and 2 others like this. From what Forex know is forex a lot retail traders offer pip spread on FX market. I think you are forex that hedge forex pays a lot less spread than that forex to large transcation volume. Let's assume they pay 0. Couple of articles that proved discretionary FX trading is dead when competing with automated banks. You must log in or sign up to post here. 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ex Goldman Sachs Trader Tells Truth about Trading - Part 1
ex Goldman Sachs Trader Tells Truth about Trading - Part 1
2 thoughts on “How do investment banks trade forex”
Sadly, in many African nations, especially those in Sub-Saharan Africa, adult literacy rates are well below 50%, and many youth lack the most basic and primal educational opportunities.
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Sadly, in many African nations, especially those in Sub-Saharan Africa, adult literacy rates are well below 50%, and many youth lack the most basic and primal educational opportunities.